Included in the material was a copy of an email sent by MTA Deputy Director of Taxi Services Christiane Hayashi dated March 25th, 2011, and addressed to Sonali Bose, the agency’s chief financial officer, and other recipients.

In that email, Hayashi responds to two questions being posed at her by Nathaniel Ford, who was the MTA chief at the time, and backed up by Sonali Bose, regarding the distribution of ad revenues generated by rear seat PIMs.

Bose’s first question to Hayashi was, “Who negotiated the 90%-10% split and under what authority?” Her second question was, “Why isn’t the MTA getting a portion of the ad revenue?”

The following is an excerpt from the email in which Hayashi answers Bose’s two questions…

“As to the question of ‘who negotiated the deal,’ I guess my response is that it’s not a deal so much as a regulation – while I did my due diligence and circulated a draft memo to the TAC, it comes from a place of regulatory authority, not negotiation. The SFMTA has no privity of contract with the equipment providers – Veriphone, Wireless Edge and CMT have contracts with the taxi companies.

Why 10% to the Driver Fund? Because, like the medallion sales program, I felt it important to be able to point to some benefit to drivers in order to make the very unpopular change go down more smoothly.

If he question is why not a share to the SFMTA, I guess my answer is that this is equipment that is owned by third party vendors and being installed at no cost in privately-owned vehicles driven by independent contractors. We come at it as a regulator, and the permit fees we receive are supposed to cover the cost of administrating our program. I think that I would have gotten tremendous resistance from both companies and equipment vendors if I tried to demand a slice of advertising revenues for the SFMTA as part of the price for a company to get a waiver from the regulator. It would be like granting a building permit on the condition that the Planning Department could have a share of the advertising revenues from the building.

Of course, as we have discussed previously, there may be a place for bringing taxi advertising generally into the SFMTA, but if we do it would have to be a cooperative situation with the companies, where we agree to bear the administrative burden and use our greater negotiating power to increase their revenues in exchange for a share. That is a distinct possibility that we can continue to explore. I think the companies would embrace it if we can improve their advertising yield and reduce their administrative costs. I think I mentioned to you that the good time to broach this would be when we propose uniform top lights for all taxis with uniform advertising space that we could manage on behalf of the companies. That is something we accomplish during the next fiscal year if that is the policy direction.

I hope I have explained a very messy situation. Let me know if you have further questions.”

A scanned version of the emails text (sometimes hard to read because it’s scanned) is available and can be viewed by CLICKING HERE“